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World’s top ten turbine makers double R&D spending: WoodMac

Push for larger on- and offshore models to drive up technology investment to over $2.5bn by 2023

The world’s ten largest wind turbine makers have more than doubled their investment in R&D in the last four years, reaching €1.6bn ($1.8m) in 2018, as demand grows for ever-bigger on- and offshore models, according to the latest research from Wood Mackenzie Power & Renewables.

Spending plans at OEMs including Vestas, Siemens Gamesa, MHI Vestas, GE Renewable Energy, Nordex and others, the analyst added in its Next-Generation Wind Turbine Models report, point to the trend continuing, with forecasts expenditure will hit €2.3bn by 2023.

“Turbine OEMs have accelerated R&D investments in next-generation turbine platforms, battling against new unit sales margin compression and the market’s need to further reduce wind energy’s levelised cost of electricity [LCOE],” said Wood Mackenzie principal analyst Shashi Barla.

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“Turbine technology investments are central to lowering LCOE below the €15-20/MWh mark and mitigating developer/off-taker increased exposure to merchant power prices.”

He noted that turbine makers are expected to “continue their frantic pace” of new product introductions, with 7-8MW onshore models with 200-metre-plus rotors foreseen being in showrooms by 2025 and 20MW-plus offshore machines with 280-metre rotors “possible before 2030”.

“Offshore wind turbine sizes are expected to sit at around 20MW by 2030. The cost of technology, balance of plant equipment and installation of vessels to handle such large components will play a crucial role in this increase,” said Barla.

“Turbine rotor diameter remains the central product differentiator for turbine OEMs. However, the knock-on impact of blade enlargement requires continued innovation on rotor, tower and drive train technologies in order to bend cost/performance curves.

Barla spotlighted that OEMs would have to “work in tandem” with the rapidly evolving supply chains to guarantee these technologies “can be developed and deployed cost-effectively.”

The technology-powered R&D push is seen leading to almost 100 new models of turbine being launched onto the market in the next five years, particularly in “high volume” markets such as China, India and the US, according to WoodMac.

“Ultra-low wind IEC IV class wind turbines, within the 3.XMW class, are becoming mainstream platforms in China. New transmission lines in high-wind provinces Inner Mongolia and Xinjiang are alleviating grid congestion, therefore enabling new wind projects to proceed. OEMs will deploy the up-rated IEC class turbines in these provinces,” said Barla

“There’s strong interest from western OEMs in India as domestic OEMs face challenges. Most OEMs are expected to migrate to the 3.0MW configuration with 145-155-metre rotors within the next 12 months.”

The foreseen “mass migration” to a product ‘platform development’ engineering philosophy will expand the number of new product variants tailored to specific wind regimes, he noted.

“Lower product development costs, flexibility in component sourcing, stronger supplier relationships and increased economies of scale will result in a more cost-effective approach to mass customisation. This will address the global procurement needs of developers and asset owners.”

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